A businessman known as the “Taxi King” has pleaded guilty to tax evasion in New York State Court and agreed to cooperate with investigators as a potential witness. The case could have national implications because of who the man’s significant business partner is: President Trump’s lawyer Michael Cohen.
Evgeny Friedman, a Russian immigrant, at one point owned 800 taxi-cab medallions, the plaques that license yellow-cabs to operate legally in New York City. At its peak Friedman’s business was estimated to be worth about $1.5 billion.
The rise of Lyft, Uber and other ride-hailing companies put a huge dent in those values in the early 2010’s. In July 2015, Friedman defaulted on a $34 million loan from Citibank and was significantly behind on his taxes. He owed $8.4 million in back taxes at the time.
New York State charged Friedman with four counts of criminal tax fraud and one count of grand larceny, all B felonies. He was accused of failing to pay more than $5 million in back taxes. Each charge carried with it a maximum prison sentence of up to 25 years in prison.
But yesterday Friedman appeared in court in Albany, NY, and pleaded guilty to one count of failing to pay only $50,000 worth of taxes. He will receive five years of probation, and no jail time, if he holds up his end of the bargain. Officials say he has specifically agreed to aid government prosecutors in state or federal investigations.
Friedman has been Michael Cohen’s business partner for years, managing Cohen’s taxi cabs. Cohen and another business partner managed a company that operated 260 yellow cabs in the early 2000s, a business worth millions of dollars a year in revenue. Cohen reportedly still owns thirty-two taxi medallions in New York and twenty-two in Chicago, an asset-collection worth about $10 million.
Friedman has continued to manage Cohen’s cabs despite being barred by New York City from managing medallions. Friedman, an attorney, was also disbarred from the New York State Bar Association earlier this month because of the charges.
Friedman’s plea could bode ill for Cohen whose office and homes were raided by FBI agents last month. Federal investigators were searching for tax documents, business records and correspondence between Cohen and his clients, including the President. It has since been revealed that investigators are looking into any and all communications between Cohen and the 2016 Trump campaign about suppressing “potential sources of negative publicity” for the President.
Cohen has been the President’s attorney for the better part of eleven years but his role within the Trump organization went far beyond legal representation.
He’s served as a negotiator for the Trump organization in real estate deals from the U.S. to Russia, started a website for Mr. Trump on a potential presidential campaign in 2012, and served as the main point of contact to allegations of fraud at the now defunct Trump University.
He also has a wide array of personal business interests from taxi cabs to real estate. Such a wide array of dealings likely make him a high-value target for federal prosecutors. That may ultimately imperil President Trump.
The President’s legal team however has downplayed the connection. “He’s just not involved in the taxis,” said Rudy Giuliani, the President’s attorney, of Trump. “He has as much involvement in it as I do.”
Friedman has sought to defend Cohen from any negative publicity brought about by his plea. “Michael is dear dear personal friend and a passive client! That’s it!” he told The New York Times. “I am humbled and shamed!” he said, adding that his plea showed he was “taking responsibility” for his actions.
Asked by The Times if he was cooperating with authorities however, Freidman did not respond.
Photo by Momos via Wikimedia Commons